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GST on Joint Development Agreement

1. Our understanding

1. Background and Understanding

1.1. In a Joint Development Agreement (JDA), we understand that there will be no direct monetary consideration towards the flats being constructed and handed over by the builder to the landowner. The builder would be given the right to develop the complex, sell his share of flats along with proportionate Undivided Share (UDS) land and retain the sale proceeds, though the entire land is owned by the landowner. Further, we understand there would be no transfer of such UDS land in favor of builder, in the absence of any registration of such land in builder’s favor (which is a must under the Transfer of Property Act), but the landowner would only agree to transfer the UDS land, to the buyers, who buys the builder’ share of flats.

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4 Comments

  1. Karishma says:

    To Mr. Ajay: Don’t you think entire consideration (i.e. Development Rights received from the landlord) is not received ENTIRELY after completion?
    You have contradicted your comment’s first & last sentence

  2. Karishma says:

    Don’t you think entire consideration (i.e. Development Rights received from the landlord) is not received ENTIRELY after completion?
    You have contradicted your comment’s first & last sentence.

  3. sprahakar rao says:

    Many builders under JDA prior to 1.7.17 are not paying any GST/service tax on the ground that they are selling fully constructed flats n hence no liability of service tax for the prior period or for the subsequent period of 1.7.2017 arises as the same were constructed prior to GST regime. Thus they are not paying service tax for the prior period though the flats were constructed prior to 1.7.17 but whose possession/sold after the said date. Is it correct practice?not to pay ST earlier & no GST now?

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